Wednesday, Jul 18 2012
• 10 a.m. (ET)

Widespread Drought And Water Shortages

The U.S. is experiencing its most widespread drought in more than fifty years. In its monthly report, the National Climatic Data Center reported more than half the country was in moderate to extreme drought at the end of June. Farmers are losing crops and pastures at alarming rates, especially in the nation’s corn and soybean belt. The Department of Agriculture declared a thousand counties in twenty-six states as natural disaster areas. Many fear the drought will get worse before it gets better. What this could mean for food costs, the nation’s water supplies and weather patterns across the globe.

Guests

Coral Davenport
energy and environment correspondent for National Journal.

Alan Bjerga
agricultural reporter for Bloomberg News.

Joseph Glauber
Chief Economist at the Department of Agriculture.

Brian Fuchs
climatologist at the National Drought Mitigation Center.

Raghu Murtugudde
professor from the University of Maryland.

Transcript

10:06:56

MS. DIANE REHMThanks for joining us. I'm Diane Rehm. More than half the nation is in a state of moderate to severe drought. High temperatures and low rainfall have endangered corn and other crops and raised concern over possible water shortages. Joining me in the studio to talk about the drought and extreme heat, Raghu Murtugudde of the University of Maryland and Coral Davenport of National Journal magazine.

10:07:30

MS. DIANE REHMJoining us from a studio in Lincoln, Neb., Brian Fuchs of the National Drought Mitigation Center. Before we begin our conversation, we're joined first by Alan Bjerga from Turtle Lake, N.D. He's an agriculture reporter for Bloomberg News. Good morning to you, Alan. Thanks for joining us.

10:07:57

MR. ALAN BJERGAThanks for having me, Diane.

10:07:58

REHMAlan, talk about the weather in North Dakota. I gather you had some rain yesterday.

10:08:05

BJERGANorth Dakota did have some rain yesterday. This area and Minnesota are basically the last hold out against the drought conditions in the country. They had some floods last year which ironically helped them this year, even though it was catastrophic the year before. It gave them a little bit of moisture reserve in the subsoil area that they've been able to draw on this year even though it hasn't been raining all that much.

10:08:28

BJERGAThe problem you're seeing up here, though, is that that's starting to run out, too. So what was looking like a good crop is now becoming an average crop, could become a poorer crop if they don't get rain in the next couple of weeks.

10:08:38

REHMSo what are the farmers telling you in your reporting?

10:08:43

BJERGAYou know, the most difficult thing for the farmers is just the complete lack of control over the situation. All you can do is look at the radar screens. You can look to the west to see if a rain cloud may be forming. I was speaking with a farmer in Iowa two weeks ago, Pam Johnson, and she's just talking about how the farmers really can only sit there and wait and do what they can to irrigate. But even the irrigators are difficult to run at this point if you don't have any water reserve to draw on.

10:09:09

BJERGAThis part of the country where I'm at right now is basically using up the last of its reserves. It may be enough to get the corn crops through since this is such a crucial period for pollination. We just have to wait and see.

10:09:20

REHMWhat about weather-related losses and insurance claims?

10:09:28

BJERGAWell, this could be a record year for crop insurance payouts. Last year actually was the record. The industry paid up more than $10 billion in losses for the first time because of floods up here in North Dakota, drought in the southwest, tornadoes and more in the southern -- southeast in Appalachian area. But this year, they're talking about losses that could rival the 1988 drought which is a $78 billion loss. I've talked to spokesmen and analysts with crop insurance industry. They say they're capitalized to cover it, but it's still going to be a very large payout.

10:09:59

REHMSo is there any hope that the crops or any of them can be saved to this point, or have we reached that point of no return?

10:10:10

BJERGAThe next couple of three weeks are going to be crucial. Right now you're in the tasseling and silking stage for the corn. Soy beans are in sort of a similar calendar. A lot of the wheat crop is about to come in. So North Dakota's wheat crop--and it's the biggest producer in the country--is probably going to be OK. But when you're looking at your I-states -- your Indiana, your Iowa, your Illinois -- if they're not getting two, three inches of good rain in the next couple of weeks, you're going to start seeing complete crop failures, and that's what we have to really see.

10:10:38

REHMAnd, Alan, the fact of the matter is that we could continue to see this kind of drought continuing perhaps even into the next few years. What kinds of new farming practices are they using to try to mitigate the effects of drought?

10:11:00

BJERGAWell, there's a couple of things going on. You've seen a lot of adoption of what's called no-till or low-till practices where there's less churning of the soil. That actually allows the soil to retain more of its moisture, and it's more ecologically friendly as well. A part of the reason you've seen more corn in states like North Dakota over the last two years, frankly, is genetically-modified seeds. You have more seeds that are created for drought resistance that can actually grow more quickly.

10:11:24

BJERGAAnd so in these more northern areas, less rainfall-consistent areas, you can start getting crops that maybe you couldn't have before. So those are two big things.

10:11:34

REHMDo you think farmers are praying for rain?

10:11:39

BJERGAAbsolutely. There is no doubt about it. A lot of the farmers that I talked to, that's one of the first things they say because, frankly, at this point, what else can you do?

10:11:47

REHMAlan Bjerga, he is agricultural reporter for Bloomberg News. Thank you so much for joining us.

10:11:54

BJERGAThank you.

10:11:57

REHMAnd now turning to you, Brian Fuchs, I gather new data show that more than half the country is experiencing drought. Tell us what the circumstances are that are causing this.

10:12:16

MR. BRIAN FUCHSWell, with the U.S. drought monitor product that gets updated every week, currently in the lower 48 states, we have 60.84 percent of the country that is experiencing drought right now. And with the drought monitor that started back in 1999, this is the greatest amount of the U.S. that has been in drought since we started this effort.

10:12:40

MR. BRIAN FUCHSThere's a lot of contributing factors to what we're seeing this year as far as what helped to develop this drought. With the warm temperatures that we've been experiencing since last fall and the mild winter that we had, there was a general lack of recharge in the soils going into spring. Most of the soils ended up being short on moisture as we approached growing season.

10:13:05

MR. BRIAN FUCHSAnd then, when producers started putting the seed into the ground, temperatures were really warm, and they've stayed warm. And then couple that with the dryness that we've seen and several different heat waves that have went across the midsection of the country, those have all come together to help contribute to the drought situation that continues to develop as we see drought intensify and spread into some of the regions that so far have staved off that dryness.

10:13:32

REHMSo the worst effects in the country are where?

10:13:39

FUCHSWell, right now, there's a couple different pockets of areas of the U.S. that we can identify on the U.S. drought monitor map as being the most extreme drought. Some of that is existing from drought that took place last year, so I can identify portions of Eastern New Mexico and West Texas where they've been in a multi-year drought situation where the intense drought of last summer just never was recovered from. And it's hanging on with some extreme drought conditions this summer.

10:14:12

FUCHSWe can also look into the state of Georgia, and there's a pocket of exceptional drought that has been lingering in that state for well over the past 12 months as well. And then we can go further north into the central Rockies and a very dry winter with a very low snowpack through the Rocky Mountains all the way from Colorado into Utah into the Four Corners region has allowed for extreme drought conditions to develop there.

10:14:39

FUCHSAnd then the last area that we saw develop was the area along the Mississippi Valley and up into the Midwest. And this is the area that has really developed over the last three to four months with some very intense heat through that region along with rainfall deficits of upwards of 12 to 16 inches at some of those states.

10:14:59

REHMBrian Fuchs is climatologist at the National Drought Mitigation Center. And turning to you, Raghu Murtugudde, how does what's happening here in this country compare with what's going on around the world?

10:15:17

PROF. RAGHU MURTUGUDDEYeah. I mean, there are other places in the world that are also experiencing drought right now. For example, I just came back 10 days ago from India, and the Indian monsoon this year has been way below normal. And there are places in northeast India that are flooding. Parts of Japan and China are flooding. But it's not just that. There are droughts going on that we are getting extremes, extreme droughts and extreme wet weather.

10:15:44

PROF. RAGHU MURTUGUDDEAnd this is what has to be understood in terms of what is causing it and so on. If we just look at the fact that this is the second worst drought since the '50s -- there was one before the Dust Bowl, so droughts did happen before -- but now we have one -- we had one in 2003. Now we have one in less than 10 years. So this is what we have to look at.

10:16:08

REHMRaghu Murtugudde, he is professor from the University of Maryland. He's also the executive director of the Chesapeake Bay Forecast System. And turning now to you, Coral Davenport, you've been reporting on energy and the environment for the National Journal. How do you think this drought and what's happening not only here but around the world could affect the discussion about global warming?

10:16:44

MS. CORAL DAVENPORTWell, Diane, one thing to add, unfortunately, I think here in the United States, I don't think this drought or the dry weather conditions around the world should be taking us by surprise. It should not be taking U.S. policymakers by surprise. And the reason is that these extreme weather conditions we're seeing are consistent with the projections of a steady march of scientific reports that have been produced over the years specifically for policymakers outlining, you know, what climactic changes we're going to see.

10:17:16

MS. CORAL DAVENPORTAnd I went back this morning, I looked at a 2009 report by the U.S. Global Climate Change Research Program, which is a research from 13 different federal agencies -- NASA, NOAA, National Science Foundation -- and they laid out very specifically what climate change impacts we're going to see region by region, state by state in the United States. And they said in the southwest, we're going to see future droughts becoming more severe as a direct result of global warming.

10:17:46

MS. CORAL DAVENPORTYou know, in the Great Plains, projections of increasing temperatures, faster evaporation rates, more sustained droughts brought on by climate change. This report was made specifically for policymakers. So they've had this data. They've known, you know, this information has been there. It's sort of been put on the table to be part of the debate again and again and again. There's U.S. reports, international reports.

10:18:11

MS. CORAL DAVENPORTAnd -- but, right now, I'll tell you it does not seem to be -- you know, in the midst of a presidential race, climate change, global warming is not at all part of the overall debate. And there's a question as to whether it will be reintroduced.

10:18:27

REHMCoral Davenport, she is energy and environment correspondent for the National Journal. Short break here. I look forward to hearing your questions and comments.

10:20:04

REHMAnd we're talking in this hour about the drought, how it's affecting not only many parts of this country but the world. And turning back to you now, Brian Fuchs, I'm wondering, you talked about looking back, you talked about the '30s and the '50s. Were those droughts more intense? Do you expect this drought to be as intense? How long might we see it run?

10:20:42

FUCHSWell, the drought situation that we're really discussing currently with the duration of it being so short, it's very hard to match up and compare with the drought of the 1950s, as well as the drought of the 1930s, because those were both multiyear events. They went on for several years, and before they were said and done, both events were very intense in different parts of the country. With this current event, we can really look at the forecast and see that the outlook for the next few months is still very dry, and the high temperatures continue to maintain themselves.

10:21:22

FUCHSAnd so before it's all said and done, we may be able to compare this drought to some of the historical droughts. The most discussion that I've seen so far has been that the 1988 drought that impacted the Corn Belt is very similar to what we're seeing this year. And so a lot of comparisons are being made to that because it was basically a seasonal type of drought that did not go on for multiple years. And so if we do see this drought situation continue and see it to continue to intensify, we may be able to make some of those comparisons. But, right now, it's too early to tell.

10:22:00

REHMI've heard some people calling this a flash drought because it developed in a matter of months and not over multiple years. Is that correct?

10:22:14

FUCHSYes. Drought is typically identified as being a slow onset and a slow recovery type of phenomena, more of a creeping element to it. But this year has been unique in that we did see the conditions go from being very favorable as far as agricultural conditions in the Midwest back in the early part of the spring, and then the rains that just shut off and the heat continued to intensify.

10:22:41

FUCHSAnd so we went from a point of being in fairly good shape outside of some low snowpacks in the Rocky Mountains to the point where much of the Midwest quickly intensified and dried out, coupling both the heat and the lack of precipitation in a matter of a few months. And that definitely is identifiable with what we do call a flash drought.

10:23:03

REHMAnd, Raghu, here's an email from someone who wants to know about the trickle-down effects. In other words, "What about the effect on beef prices? What about cereal or beer prices? And will a lack of food in other countries lead to political unrest next year as a result of insufficient food?"

10:23:34

MURTUGUDDEBefore I go to that, can I add one point to Brian's?

10:23:36

REHMCertainly, please.

10:23:37

MURTUGUDDESo 1988 was what was called a La Nina where you had colder than normal temperatures in the east Pacific off of Peru and around Galapagos, which we know causes droughts in Southeast and Southwest U.S. And El Nino comes and that goes away, or the La Nina goes away and the drought goes away, so you tend to have seasonal droughts. But since 2000, even when El Ninos have happened, the warming has been near the dateline, and the Eastern Pacific has remained cold.

10:24:06

MURTUGUDDESo the Southwestern and the droughts in the U.S. have been more persistent and later this year could be an El Nino, so winter may get more rain. But we don't know right now what pattern it will have. So going back to the cascades you were asking about, this kind of drought that extended far north than what we expect just from La Nina, for example, has already affected corn production, and as Alan was mentioning, even irrigation is difficult now.

10:24:35

MURTUGUDDESo there is very little time left to recover a lot of the crops. So corn is 90 percent animal feed, so that directly affects cattle industry. And already a lot of the reports of people having sold cattle have come out. So milk production goes down, beef production goes down.

10:24:54

REHMAnd costs go up.

10:24:55

MURTUGUDDEAnd costs go up. And in the meantime, corn is also an ethanol additive to gasoline, so gasoline prices could go up. If corn price goes up too much, transportation cost goes up. So you have these cascades, and it goes also to international levels because U.S. is an exporter of wheat and so on. So the demand from outside -- like, India is below -- way below normal this time. So instead of exporting stuff, they want to import stuff. So it does cascade throughout the world.

10:25:24

REHMAnd that cascading, Coral Davenport, could lead right into concerns for not only our economy but the world economy and once again into the political discussion.

10:25:42

DAVENPORTAbsolutely. You had asked earlier, you know, if this drought and if its possible connections to climate change are going to reintroduce the climate change question in the political debate. And I'll tell you that we -- it's very -- most lawmakers right now running for office are very wary of bringing up the idea of climate change. You know, even the Obama campaign has said that they don't expect to introduce the idea of climate change.

10:26:06

REHMWhy?

10:26:08

DAVENPORTI think it's politically explosive. There's a very strong new element of climate change skepticism on the right. There's a lot of fending behind that. Most of -- most climate change policy probably involves raising some kind of energy prices, will probably involve, you know, cap and trade is kind of a politically toxic policy to talk about right now. It's just not something that any of the parties or any of the candidates feel comfortable introducing.

10:26:41

DAVENPORTOn the other hand -- and also polls show consistently, it's not really an issue that voters care about. The number one issue that voters care about is the economy. Environment ranks almost dead last these days. Here's...

10:26:52

REHMBut at the same time, if the environment has an impact on food prices...

10:26:59

DAVENPORTThat changes the debate completely. Once -- and it's not just food prices. Once the environment starts to impact food prices, starts to impact insurance payments, you know, as Alan pointed out, last year was a record year for natural disaster insurance payments for flood and drought. This year looks set to be a similar year, maybe breaking that record.

10:27:22

DAVENPORTOnce you have industries like the insurance industry, like other, you know, financial industries engaging in this and saying, hey, this is costing a lot of money to the federal government, to states, to municipalities, this is costing consumers a lot of money, this is really hurting the economy. That's the way in which you see lawmakers start to get engaged when there's a big economic impact.

10:27:44

REHMAnd what about the federal government moving in to help ranchers? Raghu was talking about the fact that farmers are having to sell off cattle and that sort.

10:27:57

DAVENPORTAnd this is sort of the point at which we actually start to see bipartisan agreement, which is very rare in Congress these days, but I thought it was amazing actually. Just earlier this month, one of the very few pieces of major legislation that Congress has been able to pass this year was a flood insurance bill. And that had bipartisan support from lawmakers in states that had been impacted by record flood disasters, which is also, you know, these studies show is linked to climate change.

10:28:29

DAVENPORTAt the same time, if we see lawmakers going back and requesting drought aid for their farm -- for their farming and ranching communities, you know, one lawmaker said, I think the way this is going to happen is we're going to see lawmakers more and more realizing -- even if they're not going to admit that climate change is real, they're going to realize it's going to cost a lot of money to deal with drought, to deal with floods.

10:28:53

DAVENPORTAnd the more that conversation continues and the more money the federal government continues to have to spend to sort of patch up, you know, what's happening, that's how this debate kind of gets introduced.

10:29:03

REHMBrian Fuchs, talk about water shortages. Where do they fit in?

10:29:11

FUCHSWell, when you start talking about drought, it's the type of drought that you are looking at that will dictate what kind of water shortages develop. For much of the country right now, the drought situation has been such a short-term event that typically hydrological problems don't start developing until you've reached a longer term drought. We are seeing some water issues developing in portions of the Rocky Mountains, and that is directly related to the low snowpack through the winter months.

10:29:42

FUCHSAnd so the lack of run-off filling up those reservoirs that they use to store and transfer water through the summer has caused some water managers to have to adjust this year, and in the desert Southwest, with the influx of people...

10:29:57

REHMAh.

10:29:57

FUCHS...over the last several decades, that has really played a part in just water availability. You've added so many more users and consumers to that water pool down in that part of the country that, at some point, it does become limited on how they are going to allocate water properly in that region.

10:30:15

REHMWell -- and that was my next question, what's the view of U.S. water management at this point?

10:30:27

FUCHSWell, at this point, each state handles how their water resources are managed differently. And so with that being said, some states are very proactive in how they are managing their waters, and some are very reactive, meaning that it takes a drought event for them to go back and assess where their vulnerabilities are. The idea of planning, really, comes into place here, that when you start talking about drought events or any natural disaster, having a plan in place prior to that event taking place is going to help ease those impacts.

10:31:01

FUCHSThere are techniques and there are proper mitigation plans that are out there that can be implemented to help ease the impact of drought because drought is a natural part of our climate. We're going to see droughts continue into the future, just like we have seen them historically, and they're going to continue. We can better manage how we deal with these droughts going forward if we have proper planning techniques in place. And that starts all the way at the local level, all the way up through the federal government.

10:31:29

REHMBrian Fuchs. He is a climatologist at the National Drought Mitigation Center. And joining us now is Joseph Glauber. He's the chief economist at the U.S. Department of Agriculture. Good morning to you, sir.

10:31:48

MR. JOSEPH GLAUBERHow are you?

10:31:49

REHMI'm fine. Thank you. But the country is suffering, and I'm wondering exactly how the drought is affecting corn and soybean prices.

10:32:01

GLAUBERYes. This has been quite an extensive drought and probably the worst since 1988. It's certainly affecting the corn and soybean regions. Right now, about 80 percent of the U.S. corn and soybean crops are in areas that are affected by drought. And the -- both the corn crop and the soybean crop have deteriorated a lot over the last six weeks. Right now, we're estimating that about 38 percent of the U.S. corn crop is in poor or very poor conditions and about 30 percent of the soybean crop.

10:32:35

GLAUBERBecause of that, we -- last week, we've reduced our estimates for corn yields down to 146 bushels per acre. That's reduction of about 12 percent from the levels that we were forecasting a month earlier, so a pretty large impact on corn. We've increased -- certainly, if you look at the cash prices for corn and soybeans, they're up considerably, and corn prices are up around almost 40 percent.

10:33:06

REHMFrom $4.99 to $6.33 a bushel?

10:33:10

GLAUBERThat's right. They're -- well, if you look at the cash prices for corn, they went on June 1 in southern Iowa roughly around $5.70. They're now, at the first part of this week, up around $7.90.

10:33:27

REHMWow. Wow.

10:33:28

GLAUBERIt's a large -- almost, you know, a 40 percent increase.

10:33:30

REHMSure.

10:33:31

GLAUBERFor soybeans, about $13.50 in June 1, up, now, $16.70. That's up around 24 percent. And that's pulled up other commodities, so wheat prices as well. They're up almost 29 percent. So there's been a lot of upward pressure. We've certainly raised our forecast for corn prices and soybean prices for next year, again all of this due to sharply reduced crop prospects.

10:33:59

REHMAnd you're listening to "The Diane Rehm Show." So, Joseph Glauber, what is all this going to mean for consumers? Are we likely to see higher prices pretty quickly at the grocery store?

10:34:17

GLAUBERThe impacts actually will be far smaller than the percents we were just talking about, and they will take time to get through the system. One, we don't consume much corn ourselves, or at least directly. There's a little bit of corn. Less than 10 percent of the crop goes into things like production of cornmeal and corn chips. Most of it goes to either industrial use for things like biofuels or animal feed.

10:34:44

GLAUBERSimilarly with soybeans, vegetable oil, of course, we do -- soybean oil does end up in salad oils and other things. But the protein -- the meal that's produced from soybeans largely goes to cattle. So the impact, ultimately, will be through meat and poultry and dairy over time, and these producers have, you know, feed costs account for about 50 percent of their overall total cost. As these direct commodity prices go up, of course their margins get squeezed, and what happens typically is that many will either not expand or, in some cases, liquidate their herds.

10:35:24

GLAUBERAnd, in fact, the counterintuitive result is that prices actually fall, and we've seen cattle prices come down and hog prices come down. But if you look out into next year, the futures prices for delivery in 2013, you do see some increases there. Now, the good news is is current food inflation rates that just came out yesterday show roughly 2.6 percent increase, June prices in 2012 compared to June 2011.

10:35:55

GLAUBERThat's roughly in the range of the two to 3 percent that we've seen since the early '90s. We had a spike back in 2007, 2008. We had another little run-up in inflation in 2010, 2011 that we're just now seeing prices come down from. But the point is is that the impacts will take a little bit of time. Our current forecast for inflation for 2012 are in the 2.5 to 3.5 percent range. Obviously, we'll be updating those estimates as we move forward.

10:36:27

REHMAll right. All right. And -- but the U.S. is the world's top grower and exporter of corn. So is the U.S. going to be able to meet its obligations of exports this year?

10:36:45

GLAUBERWell, we do think that the corn exports will be affected by this. Before -- last month, when we still thought we were going to have a fairly good corn crop -- a record corn crop, I might add -- we were expecting corn exports to be roughly 1.9 billion bushels. That's, you know, about 15 or so percent of the total corn crop. That's going to be -- we've reduced that significantly down to 1.6 billion with this last estimate.

10:37:15

GLAUBERAnd, of course, this is a very fluid situation with -- since the time we did the estimates, actually drought has worsened. We'll be looking at the -- in August, early August, we'll have crop production numbers on the 10th of August that should give us a much better idea.

10:37:34

REHMAll right. And I want to thank you so much for joining us. Joseph Glauber, chief economist at the Department of Agriculture.

10:40:04

REHMAnd I can see we have many questions about the drought, its impact on food supply, water supply and politics. We've got many people with us to answer your questions. We'll open the phones now, first, to St. Louis, Mo. Good morning, Catherine. You're on the air.

10:40:28

CATHERINEGood morning. This is such an amazing opportunity. I grew up -- my mother was born in 1912, and she was through the 1930s, the, you know, the Dust Bowl. And they called them the dirty '30s. And she lived in Saskatchewan, and she taught in a women's schoolhouse. And for seven years, they had crop failures. And she actually went on to nursing school.

10:40:54

CATHERINEBut at the end of the seventh year of crop failures, some time during the winter, the farmer with whom she lived hung himself. And then the following year, the eighth year, she said, if he had just held on, he would never have seen so much wheat in his life.

10:41:17

REHMHa. Isn't that...

10:41:18

CATHERINEAnd she repeated that story, you know, so much as a cautionary tale. Hold on during the hard times.

10:41:25

REHMBrian Fuchs, is that what you're advising?

10:41:30

FUCHSYes. Over the last several decades, there's been some great technological advances in how agriculture has come along, not only from genetics research but also to tillage practices and also to the advent of irrigation in those areas that were hit hardest by the Dust Bowl back in the '30s. They didn't even have a way to get to those reservoirs of groundwater that were available right below them.

10:41:56

FUCHSSo we have some technology at our disposal that was not available even in the 1950s drought. So we hope producers can hang on, use the tools available to them and get through this situation as best they can, hopefully, that next season they come out ahead again.

10:42:15

REHMThanks...

10:42:16

FUCHSThe last few years have been quite well for agriculture, so hopefully this is just a one-year hiccup.

10:42:22

REHMThanks for calling, Catherine. And here's an email for you, Raghu. "When we have a big heat wave in the U.S., does that mass of hot air affect Europe and onward in the eastern flow of weather?"

10:42:43

MURTUGUDDEYes. I mean, there was some work a few years ago that argued that the waves that are generated by the Rockies over the U.S. reach all the way to Europe and actually provide warmer weather over Europe compared to U.S. at the same latitudes. So this heat dome we create here or we have here does carry the energy all the way across Europe.

10:43:06

REHMInteresting. Here's an email from Michael for you, Joseph Glauber. "Would it be feasible to remove the ethanol component of our gasoline for a short time to alleviate the corn shortage?"

10:43:25

GLAUBERThere are -- in the 2007 Energy Act that established these mandated levels for ethanol to be blended into the gasoline supply, there are waiver authorities that EPA can respond to a waiver request and then look at -- see what the impact of ethanol is having on prices. I might say, though, that the ethanol market already is responding to higher prices. Margins have declined significantly for ethanol producers, and this past week of ethanol production was the lowest in the last two years.

10:44:05

GLAUBERSo they, too, actually are lowering their use of corn due to the higher prices. And there are flexibilities built in to the program even without the waiver in the sense that producers receive credit for producing ethanol. And there are currently about 2.5 billion gallons of surplus credits of ethanol production that can be applied towards these mandates without producing another gallon of ethanol. So I think we will see some adjustments in the ethanol industry.

10:44:39

REHMGood. All right. To Catherine in Danville, Pa. Good morning.

10:44:45

CATHERINEHi. Thanks for taking my call.

10:44:46

REHMSurely.

10:44:47

CATHERINEI just wanted to comment that it seems the environmental conversations that we're having today are the same as when I was a kid -- I'm 32 now -- and it's so frustrating that we're still having the same conversation. And when I was in college, I asked a professor to help me bring in an environmental program from our state of Pennsylvania to bring green initiative to our city. And the professor told me, you know, I don't think that we need to do this, that we don't have an environmental crisis right now and that, once we reach an environmental crisis, we'll be able to mobilize really fast to fix it.

10:45:27

CATHERINEAnd I just wanted to know, I mean, you guys already answered my question. It takes economic pain for politicians to make a move. But once we have that pain in water scarcity and soil conservation, lack of food, are we going to be able to come up with solutions fast enough? And also, one other question, I know the U.N. has an -- the U.N. environmental sustainability program, and I was wondering if the U.S. is involved in that and how we are involved in that.

10:45:59

REHMAll right. Thanks for your call. Coral.

10:46:02

DAVENPORTWell, what's interesting about the environmental policy solutions is they're sort of a set of policy solutions that have been on the table for many years alongside these reports. These reports come out again and again, saying, here's the problem, you know, the solution requires mitigation of carbon emissions, and there's a slate of policies that a lot of economists agree on, that a lot of environmentalists agree on. The hold-up is always political. And there is a question as to how big a crisis it really takes to push change.

10:46:35

DAVENPORTAnd another issue, we've seen this on again and again is gasoline prices. We saw this this spring. Gasoline prices spiked up. Everyone, you know, everyone was talking about energy prices. Everyone was talking about, you know, the big impact on the economy, the prices went down. No one's talking about it anymore. It's -- the political will is not there anymore. And we see that again in the energy environment world again and again. There's sort of a crisis. Everyone cares about it for a few weeks or a few months…

10:47:00

REHMA very brief period.

10:47:02

DAVENPORT...but not enough to generate the political will to actually move legislation.

10:47:08

REHMJoseph Glauber, is that how you see it as well?

10:47:12

GLAUBERWell, it certainly is the case that we've had these periods of -- where, you know, we've had droughts over the last several years. I mean, one caller talked about the 1930s, and I heard the '50s also mentioned. You know, we know that this was a very dry June, for example, in the Midwest. The responses -- you're right. I mean, the interesting thing to me is the last two times we've had food spikes, they were also accompanied by higher energy prices. This time, it's -- of course, energy prices are down.

10:47:47

GLAUBERAnd that's part of the problem that is, I think, contributing to as far as the ethanol production is concerned. They're viewing lower prices for ethanol and higher corn prices and one of the reasons they're dropping production. But I think it -- the caller -- back to the caller's point about -- that crises tend to be centered along the, you know, whatever is going on at the time...

10:48:13

REHMRight.

10:48:13

GLAUBER…but certainly we tend to have shorter memories. And by the time...

10:48:16

REHMUnfortunately.

10:48:17

10:48:24

REHMThe crisis has long passed. Raghu.

10:48:27

MURTUGUDDEYeah. I just want to add to the caller's questions that it's not political will. It does depend on the resources, corporations put into scuttling the processes of regulations. But from the ground level up, people like you have to pursue your interest in terms of education. Are we giving enough education to your children, for example, to get them excited about the environment? That -- I do some work on that, so engaging people in the environmental issue is just as important.

10:48:58

REHMBrian Fuchs, here's an email from Marietta, N.Y. Jenny writes, "How will the water use and greenhouse gas emissions from hydrofracking affect future drought problems? Can you respond to that?"

10:49:20

FUCHSWith the hydrofracking that's going on, it's been a fairly new process. And so there hasn't been a whole lot, at least on the drought side of things, looked into that. I know I've been contacted by people in the industry looking at areas and how vulnerable they are to drought historically to see if it would be a water issue if they started using those techniques in certain parts of the country.

10:49:48

FUCHSWith that being said, I think it's one of those areas that we need to be very cognitive of how much water is available in a region before you go in and start using these techniques because they do use a great deal of water.

10:50:00

REHMAnd here is a follow-up question from Matt. "Can any of your guests discuss the potential for increased wildfire danger, as we saw in Texas in 2011 and as we're seeing out west even now?" Brian Fuchs.

10:50:24

FUCHSWe can sometimes make some connections between the fire season and drought. Even on the wettest years, we typically -- we'll see forest fires break out through the mountains and even some wildfires on rangelands. Droughts will start to increase those chances just because that vegetation does dry out in the forest there. The underbrush is very dry due to lack of the run-off and lack of snowfall in the winter that they do become more vulnerable.

10:50:53

FUCHSAnd what we've seen through the Rocky Mountains earlier in the summer and even in other parts of the country now, that fire risk does start to increase as you go into this warm, dry period in the summer.

10:51:05

REHMAll right. And to McLean, Va. Good morning, Gregory.

10:51:10

GREGORYGood morning. A leaky faucet can drink up 5,000 gallons a year. Moving back east after years in desert Arizona, I noticed little awareness of water waste. In Arizona, my water bill hit $140 a month. I cut it in half with things like fixing leaks and shorter showers. How many governments outside the west are encouraging painless action? How many are passing ordinances requiring conservation measures like low-flow faucets in new construction?

10:51:39

REHMRaghu.

10:51:40

MURTUGUDDEYeah. I mean, the fact that where the water comes from -- we live in the city. We turn on the faucet, and there's always water. And we have also been removed from food production. So food and water waste stage is a big problem. And there are people working on this to, say, put a meter on the faucet that shows how much you've used during brushing your teeth or shaving or shower and so on. So there are people trying to put kind of a subtle message to people that you may be wasting water.

10:52:09

REHMBut it can't be subtle.

10:52:11

MURTUGUDDEWell, it turns out that people with very little message in front of them do react. They are much better in their behavior.

10:52:20

REHMCoral.

10:52:21

DAVENPORTIt's interesting -- back to the political debate and polling. I talked about how in polling, voters tend to rate the environment as kind of dead last as an issue that they're concerned about. But within environmental issues, water is the number one environmental issue that Americans are concerned about. Global warming and climate change is one of the last. But I've been talking -- I've been hearing from some strategists and sort of folks who are working on how do we elevate this policy, how do we engage, you know, kind, you know, move past the crisis talk and actually engage political will.

10:52:57

DAVENPORTAnd there is a conversation going on about saying water is -- should be the organizing principle for how we address environmental legislation. And this is something that voters and lawmakers consistently care about and consistently see the impacts in our lives and that that could be something that could help drive the debate.

10:53:16

REHMCoral Davenport, energy and environment correspondent for The National Journal, and you're listening to "The Diane Rehm Show." Let's go now to Willowick, Ohio. Good morning, Lance.

10:53:33

LANCEGood morning. I'm just struck by how -- and I'm curious if your panel has any information about this. But it seems that, at least in America -- it seems to me, more so than perhaps any other country -- we're so focused on our own personal need at the moment and only seem to respond to any issue when it hits us in the pocketbook. I mean, the fact that climate change is at the bottom of people's concerns is -- speaks volumes to me. And it saddens me.

10:54:01

LANCEAnd it just seems like we're shooting ourselves in the foot -- in our feet as a country. I'm only responding to things when it affects me and my pocketbook personally. And other than that, I don't really care about it.

10:54:12

REHMJoseph Glauber, do you want to talk about that?

10:54:15

GLAUBERWell, I think -- I mean, there's certainly the public sentiment towards climate change. I think that's been already discussed here and where it shows up on polls. I do think the flipside -- if you look at mitigation efforts, I think there is a lot of interest in that side of climate change. And so I know a lot of producers or ranchers and farmers are very much interested in drought mitigations, so new varieties and water conservation techniques and things like that that, you know, they see in, you know, in times of drought.

10:54:49

GLAUBEROr if they see perceptible problems, you know, emerging in their region, there is a lot of interest, and we certainly get a lot of that input here at the department.

10:55:01

REHMIs it true -- Joseph Glauber, one of our listeners, Chris, asks, "Is it true that nearly 80 percent of U.S. farms are family-owned? And if so, can't a family farm sustain financially through extensive drought?"

10:55:22

GLAUBERYeah. That's a great question. It is true. I think we often talk about these larger farms as if they were, you know, corporations-owned, you know, publicly traded corporations. For the most part, they aren't. They're -- they may be incorporated, but they're family-owned. And, you know, and, of course, American -- U.S. farm sector is very diverse in terms of smaller farms and larger farms.

10:55:43

GLAUBERBut, really, what has changed a lot over the last 50 years is that there are programs now that will protect crop producers in particular in the event of drought. We have a very extensive crop insurance program. We are right now about 85 percent of the corn -- the corn that's produced in the country and soybeans that are produced in the country are insured. These producers will -- for the most part, are insured at high-coverage levels. And I might add, that's compared to 25 percent back in 1988. So we have seen this big growth in this program.

10:56:20

REHMNow, is that all government insurance or is it private insurance?

10:56:25

GLAUBERWell, it's sold by private companies. But the premiums are partially subsidized by the government...

10:56:32

REHMI see.

10:56:33

GLAUBER...and the government provides additional support to the companies by the frame, the delivery costs and help in reinsuring of the underlying losses. So there are a lot of subsidies in this program.

10:56:46

REHMAll right. OK. And I'm afraid we've got to leave it there. Joseph Glauber of the Department of Agriculture. We have also had on Brian Fuchs, climatologist at the National Drought Mitigation Center, Coral Davenport of National Journal magazine and Raghu Murtugudde of the University of Maryland. Thank you all for a most informative discussion. Thanks for listening. I'm Diane Rehm.

Monday, Mar 30 2015Airstrikes led by Saudi Arabia in Yemen against anti-government forces are raising fears the conflict may spread. A look at how regional powers are aligning and debate over the role of the U.S.

Friday, Mar 27 2015An update on the plane crash in the French Alps. Saudi Arabia launches air strikes against Yemen rebel bases. And President Barack Obama slows U.S. troop withdrawal from Afghanistan. A panel of journalists joins Diane for analysis of the week's top international news stories.

Friday, Mar 27 2015The House passes a budget with no Democratic support. Republican Senator Ted Cruz enters the 2016 presidential race. And the Army charges Sergeant Bowe Bergdahl with desertion. A panel of journalists joins Diane for analysis of the week's top national news stories.